CFTC Warns Prediction Markets Over Manipulation Risk in 'Mention' Contracts
The U.S. regulator says contracts tied to what a named person will say or do may be especially open to manipulation, and wants platforms to show safeguards.
AfroEuropa Newsroom
AfroEuropa desk
The U.S. Commodity Futures Trading Commission (CFTC) has cautioned prediction-market operators that contracts based on what a specific individual will say or do may be particularly open to manipulation.
In an advisory, the agency drew a distinction between these so-called mention markets and contracts whose results are generated independently and can be checked against external sources. According to BitKE, the CFTC said such contracts depend on the actions of a named individual and may be presumptively readily susceptible to manipulation, and it reminded platforms that derivatives listed for trading must not be readily vulnerable to manipulation.
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